The U.S. Latino Opportunity, Revisited
Last year, we shared what we, at Chingona Ventures, refer to as The Latino Investable Opportunity. This opportunity highlights the intersection of demographic changes, the rise in Latino entrepreneurial initiatives, and the opportunity to deploy catalytic early-stage capital with U.S. Latino founders and businesses that better serve U.S. Latinos.
As we consider what the future may hold for the United States over the coming decades, we are carefully watching the trends spearheaded by the increasingly Latino population. In particular, we are interested in how this diversity will shift labor markets, cultural norms, the education landscape, and beyond.
Below, we highlight various trends that are shifting how America will look, live, learn, and work.
Demographic Shifts
Trend: The U.S. Latino population is young and rapidly growing, more than you might believe.
Quadrupling in size since the 1980s, Latinos currently represent 19.4% of the U.S. population, and that figure is projected to rise to 26.9% by 2060. Over the last decade, Latinos have contributed to 53% of the nation’s population growth and are expected to account for 78% of net new workers between 2020 and 2030.
Beyond the sheer numbers, age distributions reveal a stark difference between Hispanic and non-Hispanic groups, with U.S. Hispanics skewing much younger and resembling the population pyramids of developing nations. As these young adults enter their prime working years, we believe their preferences will shape demand for goods and services.
Trend: Latinos are everywhere. They’re also increasingly concentrated in states and sectors of economic significance.
From the UK to the Olympics (as medalists, spectators, and event architects), New York Fashion Week, and even the moon, Latinos are everywhere. The same holds true, and increasingly so, for U.S. states and across job sectors.
While not evenly distributed, U.S. Latino workers are notable populations in practically every state and represented in every industry. In fact, when it comes to the group’s distribution across broad categories of employment like professional, sales, production, service, and construction, U.S. Latinos are fairly evenly distributed, unlike other groups.
This dispersion across geographies and job categories, coupled with its size, presents a unique opportunity for this group. If the post-pandemic years have shown us anything, it is that sectors like agriculture, supply chains, and construction are mission-critical. And, if your product will be used by Latinos, it needs to be built with them in mind. We believe U.S. Latinos are poised to push innovative and technological frontiers in both white- and blue-collar industries that are of national strategic importance, such as construction, supply chain, and financial services.
Culture Shifts
Trend: Listening in Spanish, Responding in English — U.S. Latinos are increasingly becoming English-first speakers. This does not mean it is time to do away with Spanish.
U.S.-born Latinos increasingly use English as their dominant language. However, there are certain mediums, such as music, which Latinos still prefer in Spanish. It is not just Latinos who like Spanish music either; Spanish is the second most streamed music language globally, showing that people beyond Latino audiences can connect with culture-forward content, regardless of fluency.
All consumer companies focused on U.S. markets will need to understand how to engage with this population in a way that resonates. From what we’ve seen, most companies have a long way to go when it comes to understanding the evolving nuances of this group. 👀
Trend: U.S. Latino culture is becoming its own “thing.”
Latino culture is extremely diverse, and there is no singular “Latino experience.” However, U.S. Latino culture is increasingly diverging from Latin American-based cultural references and developing its own distinct identity.
While not a new phenomenon (see Tex-Mex culture developing the margarita in the 1940s and bringing us Selena in the 1990s, to Chicago-born Sandra Cisneros’ work examining cultural hybridity, and New York City and Miami pushing Latin musicians to international audiences), U.S. Latinos continue to push the boundaries of U.S. culture. In modern applications, U.S. Latino cultural evolution can be seen in Chicano streetwear, gen-Z Latinx influencers, and emerging U.S.-based Latino artists.
As more of this population continues to be U.S.-born, we believe culture will continue to diverge from trends in Latin America. This evolution is not without growing pains. Currently, online discourse is debating whether Jenny Ortega can be considered Latina if she doesn’t speak Spanish, as part of a broader conversation regarding the “no sabo” phenomenon. (“No sabo kids” refers to U.S. Latinos who speak grammatically incorrect or “broken” Spanish).
The divergence from Latin American culture is part of a broader, Gen-Z-driven trend of ruthless authenticity. Peso Pluma, a Gen-Z Música Mexicana artist now based in California, embodied this split when he noted how he was inspired by Chalino Sanchez and Ariel Camacho’s music but never connected to the aesthetics. He stated, “My favorite genres have always been reggaeton and hip-hop… That’s why I don’t wear the sombreros. I don’t wear the boots. I’m not that.”
More recently, at New York Fashion Week, Willy Chavarria from Fresno, California dedicated his show to the working-class laborers who “make this m**********r run.” In response, ShowStudio, an online fashion community, said Willy Chavarria could be the next Ralph Lauren.
This younger, unapologetic, and highly online Latino population will continue to exert increasing cultural influence across media, politics, business, and more. If you haven’t been paying attention, now would be a good time to start.
Education Shifts
Trend: U.S. Latinos still have the lowest levels of educational attainment. Younger U.S. Latinos are catching up, but we’re all at risk if this issue is not addressed.
Latinos continue to have the lowest rates of educational attainment relative to other groups. While these metrics are steadily improving, improving educational attainment is critical to the future of our innovation economy. If a substantial portion of the workforce lacks necessary skill sets, this situation will exacerbate skilled labor shortages in critical sectors and slow down economic growth.
Addressing these educational disparities through public, private, and non-profit interventions will be critical for ensuring that the growing Latino workforce can fully contribute to and benefit from America’s future economic success.
Trend: Double-Edged Swords. The Latino market’s digital distribution advantage could be a blessing or a curse.
We’ve known and seen that to truly target and acquire the U.S. Latino community, businesses need to meet these people where they are, build authentic relationships, and maintain trust.
This is especially true for millennial and younger generations because Latinos have a higher tendency to share what they love (and hate) with their friends, family, and community. This built-in propensity for virality can go in either direction, like Peso Pluma’s parabolic rise to fame or the Democratic Party’s frequent accusations of Hispandering, which have contributed to a historically Democratic voter base leaning increasingly independent.
These days, it’s not enough to make surface appeals to culture (and we welcome this change).
Economic Potential
Trend: The U.S. Latino community is an economic powerhouse despite structural barriers. In venture capital, it’s early, but there is a steadily growing number of success stories.
By now, we’ve seen the figures about the size of the U.S. Latino economy. If you need a refresher, U.S. Latino GDP is growing faster than the rest of the U.S. economy and its total economic output reached $3.2 trillion in 2023. While impressive, this growth is constrained by structural barriers, including challenges regarding access to capital.
Zooming into the venture landscape, several Latino founders have started and scaled highly successful businesses. In fact, two founders in the list below are in our portfolio.
Our Take: Early stage venture capital is a critical component of fully realizing the Latino Opportunity.
We know that, all else equal, Latinos face greater barriers accessing capital, particularly when it comes to securing financing to start and scale businesses.
Additionally, if today’s Latino businesses were equitably funded, they could generate $1.4 trillion in additional revenue. These financing bottlenecks are withholding Latinos from fully realizing their potential within the American (and global) economy.
A more inclusive and equitable ecosystem is part of the solution to unlock the Latino opportunity, particularly at the earliest stages. It is precisely the Latino investors, entrepreneurs, and decision makers that will best understand and act upon the opportunities these trends present.
Chingona Ventures’ Take: Now is the time for the Latino Opportunity
Every year, less than 2% of overall startup investment goes to Latino founders. Despite all the statistics we could share, we often find a resistance towards imagining a Latino Opportunity that delivers outsized returns. To which we say, you just don’t see it, yet.
For us, we view the trends mentioned above as signals pointing towards emerging and compelling opportunities. This is also why we look for founders with the Chingona Factor.
This Hispanic Heritage Month, imaginemos cosas chingonas.
ABOUT CHINGONA VENTURES
Chingona Ventures invests in pre-seed and seed-stage companies in often-overlooked markets, partnering with founders at the earliest stages. The firm seeks to invest in financial technology, future-of-learning, future-of-work, and health companies in the United States.
While we get excited about this opportunity, we don’t solely invest in this theme or in Latino, women, or minority founders.
If you’re building in the future of work, learning, and fintech, we’d love to learn more about your business! The fastest way to get to us is to fill out the form here.
